Start an Alabama LLC — A Step-by-Step Walkthrough

Alabama does something most states don't: it requires you to reserve your LLC name with the Secretary of State before you file the document that creates the company. This is not optional and it is not the same as a casual availability check. You submit a name reservation, the state confirms the name is available and distinguishable from every other entity on file, and you receive a reservation certificate that must accompany your formation filing.

Start by searching the state's business entity name database to see whether your name — and close variations of it — is already taken. Then file the reservation through the Secretary of State's AccessGov portal.

Name requirements

• Must contain "Limited Liability Company," "L.L.C.," or "LLC"
• Must be distinguishable from all other entity names registered in Alabama — differences of punctuation, spacing, or filler words like "the" often do not count as distinguishable
• Cannot imply a purpose the LLC is not authorized for, or use restricted words (such as "bank," "trust," or "insurance") without approval from the relevant regulator

Once your reservation is confirmed, the name is held for you and you can proceed to the formation filing. Because Alabama enforces this sequence, we reserve the name and file the Articles as a single connected process — you never have to track two separate steps.

Before the Articles of Organization can be filed, you need a registered agent lined up, because the agent and their Alabama address are named in the filing. Alabama law requires every LLC to keep a registered agent with a physical Alabama street address for the entire life of the company.

The registered agent is who receives lawsuits, subpoenas, and official Secretary of State correspondence on the company's behalf. It has to be a real street address — no P.O. boxes — staffed during normal business hours.

Who can be your registered agent

• You: If you have a physical Alabama street address and are reliably available during business hours, you can be your own agent. Your address becomes part of the public record.
• Another individual: Any Alabama resident with a street address in the state — a partner, an employee, an attorney, or a trusted contact.
• A commercial registered agent service: A firm Alabama has authorized to serve in the registered agent role. It keeps a professional address on the public record instead of yours and ensures someone is always there to accept documents.

Why the choice matters

If you list your home as the registered agent address, it becomes searchable in the public business record. Many owners use a commercial service specifically to keep a home address private, and to guarantee the "available during business hours" requirement is met even when they travel or work irregular hours.

The Articles of Organization is the filing that legally creates your LLC. In Alabama the state form has historically been titled the Certificate of Formation, but it is the same LLC-creating document. You file it through the Secretary of State's AccessGov portal, and your confirmed name reservation is submitted along with it.

Online filings usually process quickly — often the same day, sometimes near-instant, generally within about a business day. Mailed paper filings take roughly seven to ten business days, with an expedite option available for mail submissions.

What goes into the Articles

• LLC name: The exact name you reserved, including the required LLC designator
• Registered agent name and Alabama street address: The agent's real physical address, no P.O. boxes
• Principal office address: The company's main location
• Management structure: Member-managed or manager-managed
• Organizer: The person filing; does not need to be a member
• Name reservation certificate: Attached to satisfy Alabama's pre-filing reservation rule

What you don't have to include

You do not list members, ownership percentages, or any financial information. The Articles are a short public formation record. Your operating agreement carries the internal details and never becomes public.

An operating agreement is your LLC's internal rulebook. Alabama does not require you to file it with the state, and it never enters any public database — but you should have one in place before you start doing business, add members, or open accounts.

What a solid operating agreement covers

• Ownership: Each member's name and ownership percentage, and how interests are expressed
• Capital contributions: What each member put in at the start and what future contributions may be required
• Profit and loss allocation: How profits and losses are split — usually by ownership percentage, but it does not have to be
• Distributions: When and how money is paid out, and in what priority
• Management: Who runs day-to-day operations, their authority, and which decisions require a member vote
• Voting: Whether votes are weighted by ownership or counted per member
• Transfers: What happens when a member wants to sell or exit — rights of first refusal, approval requirements
• Dissolution: The circumstances for winding down and how remaining assets are distributed

For single-member LLCs the agreement reinforces that the company is genuinely separate from you, which matters if anyone ever challenges your liability protection. For multi-member LLCs it is essential — without one, Alabama's statutory defaults under Title 10A govern everything, and those defaults rarely match what the members actually intended.

An Employer Identification Number is a nine-digit federal tax ID from the IRS, issued at no cost. Think of it as a Social Security number for the business — you use it on tax filings, to open bank accounts, and to hire employees.

When you need one

• Your LLC has more than one member (multi-member LLCs file a partnership return and must have an EIN)
• You plan to hire employees
• You want a business bank account — most banks require an EIN
• You've elected S-corporation or C-corporation tax treatment

A single-member LLC with no employees can technically use the owner's Social Security number for federal purposes, but getting an EIN is still worth it: it keeps your SSN off business paperwork and streamlines banking.

How to apply

Submit your application on IRS.gov using the IRS EIN Assistant. It runs roughly ten minutes to complete, and the number comes back right away — ready to use that same day. You need a US Social Security number or ITIN to apply online; applicants without one apply by fax or mail using Form SS-4.

Keeping business and personal money separate is not just good bookkeeping — it is what preserves your liability protection. Pay personal bills from the company account or run business income through your personal checking, and you hand a plaintiff the argument that the LLC is a sham and its shield should be ignored.

What most banks ask for

• Your filed Articles of Organization (the formation record from the Secretary of State)
• Your IRS EIN confirmation
• Your operating agreement (many banks require it; bring it regardless)
• Government-issued ID for every authorized signer

Local Alabama community banks and credit unions are often more flexible with brand-new LLCs than large national chains, and several online business banks can open an account without a branch visit. Weigh each option's monthly charges, transaction caps, and required minimum balances before signing up.

Alabama makes the aftermath refreshingly light compared with most states, but a couple of things still need your attention.

No Secretary of State annual report

Alabama eliminated the LLC annual report, and as of October 2024 it repealed the corporate annual report too. There is no yearly Secretary of State filing just to keep your LLC active — one of the most common ways businesses elsewhere lose good standing simply does not exist here.

Business Privilege Tax

The recurring obligation you do have is the Alabama Business Privilege Tax, filed with the Alabama Department of Revenue on Form PPT. It is based on net worth apportioned to Alabama, with a minimum, and a full exemption applies when the calculated tax falls at or below a small threshold — so many very small LLCs owe nothing but should still understand the filing.

Registered agent and taxes

Keep your registered agent current; file a change with the Secretary of State if the agent moves or resigns. On the federal side, single-member LLCs file Schedule C, multi-member LLCs file Form 1065, and S-corp elections file Form 1120-S. If you sell taxable goods or services, register for Alabama sales tax with the Department of Revenue, and obtain the state business privilege license through your county probate office plus any city license your locality requires.